Pradhan wants PSU oil cos to set up largest refinery in Maha

Oil Minister Dharmendra Pradhan today sprang a surprise by asking three state-run oil refiners -- IndianOil, BPCL and HPCL -- to get ready to set up the largest refining and petrochemicals complex in the public sector before 2017-end in coastal Maharashtra.
"I have just asked the state-run refiners to work on setting up an oil refinery-cum-petchem complex in the public sector in western Maharashtra, which should be largest in the public sector. Though it's up to these companies to work out the details, I can assure you that ground-breaking for the proposed project would happen before the end of 2017," Pradhan told reporters and refused to share details.

Considering the fact that the largest refineries are of 15 MTPA capacity, the proposed one should have higher capacity than the two IOC refineries in Paradip and Panipat.
The announcement came at an event to dedicate the fourth crude distillation unit of BPCL set up here at an investment of Rs 1,419 crore.
When asked for details, such as land and resources for such a huge project considering the skewed finances of IOC, BPCL and HPCL (according to him they have lost a whopping Rs 10,000 crore this year so far on inventory losses alone), he said, "As the minister, my job is to give broader policy guidance and not look into specifics."

The largest oil refineries in the public sector are being run by IndianOil in Panipat and Paradip, with an installed capacity of 15 MTPA each, while the country is also home to the world's largest single location refinery complex at Jamnagar being run by Reliance Industries.

RIL's first plant has a capacity of 30 MTPA, while its second unit has an installed capacity of 28 MTPA. Essar Oil also operates a 20 MTPA refinery at Vadinar in Gujarat.
But the minister spoke more on his grand vision about the proposed petchem complex, saying the plant would be built in such a manner that it will be a global oil and petchem hub.

Quoting the International Energy Agency's (IEA) projection, which recently pegged the domestic oil demand to rise to 550 MTPA by 2040 from the current 165 MTPA, he asked the state-run oil companies to think big along these projection lines.
He also said the ongoing growth in oil demand is driven by Maharashtra, and the state would continue to do so, by adding 1-2 MTPA over the next few years.
Thanking Pradhan for his grand plan, state Chief
Minister Devendra Fadnavis, who was present at the function, promised every help to realise the dream, saying his government would ensure that the project takes off hasslefree in terms of getting the vast swathe of fertile agrarian land acquired and also the green clearances.

"I would ensure that the proposed mega project gets a hasslefree start in terms of making the land available and in securing the green nod. We would not disappoint you in realising your grand vision for the state," Fadnavis said.
Coastal Maharashtra is thickly populated, with fertile farm land and a thick concentration of fishermen, who have been very vocal against large projects.
The 10,000-MW Jaitapur nuclear plant, approved earlier in the decade by previous Manmohan Singh regime, is strongly being opposed by the fishermen.
When asked about why the government is not allowing oil marketers to align retail price of petrol and diesel according to crude prices, Pradhan said the average crude price for oil products currently being sold is USD 50-55 a barrel and not USD 34-35 a barrel, which is the current international price.

"State-run oil companies are making heavy inventory losses as their average crude price is much higher than the present market price. They have lost over Rs 10,000 crore so far this year on inventory losses alone. So how can you accuse them of not reducing the retail prices?," Pradhan quipped.
The minister, however, admitted that taxes on oil products are too high but was quick to clarify that "Over 40 per cent of the taxes collected by the Centre is given back to the states and more than half of the total levies are slapped by the states. So ask this question to them."

He also said almost 50 per cent of the retail price of petrol is constituted by taxes, which are mostly state levies and over 42 per cent of the retail price of diesel is also the tax component. But the Centre can't do much as states' levies are much higher than the Central levies, he argued.
Pradhan also claimed that the oil companies had reduced Rs 13/L in retail prices of diesel and petrol, in 17 and 20 fortnightly reductions, respectively.
But this flies in the face of facts, as diesel prices have come down only by Rs 11/L and petrol by Rs 9/L, while the the Centre has jacked up Excise duty on them four times to the tune of Rs 7.5/L in the past 18 months.